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1/30/2015

Drone Market

One industry you can see soaring during Independence Day fireworks is the drone industry. Drones can be used for work and for play, and can be bought almost anywhere. Many drones have a camera that can be used in various ways, such as a real estate professional showing a home or a sports fanatic trying to record a touchdown pass. Others would like to use drones to more conveniently deliver goods to customers. The government uses unmanned flying units to spy on and deliver ordinance to the enemy. A mischief maker can use his spy drone for secret purposes. What can hinder this industry that delivers a product everyone can have a use for?

Recently, an unmanned, flying drone landed on the White House lawn. Anyone could have done this, regardless of regulations. President Obama has asked the FAA for more regulations on drones. He realizes their limitless uses for enjoyment and productivity, but also sees a potential threat to possibly anyone. How will this change the market for unmanned vehicles? http://time.com/3683923/obama-drone-gulation/

One example of how expected government regulations have influenced the market is firearm and ammunition sales after President Obama was elected to office. Firearm sales spiked before the inauguration and certain ammunition still can’t be found on Wal-Mart’s shelves most days. What are the effects on supply and demand if regulations state that the current drone technology is too high for average consumers?

The effects of government intervention aren’t always clear. What will happen to the drone market when more regulations are enforced? Will companies be able to use them for profit which would expand the economy? Will drone makers hold back spending for development until laws are set? If strict regulations are set, how does the industry continue to thrive when its product cannot be reinvented? http://money.cnn.com/2014/11/24/technology/faa-drone-regulation/

While FAA regulations will cause shifts in supply and demand for the UAV market in the United States, growth is inevitable in the worldwide market. In the article, "Worldwide, Drones Are in High Demand", Dan Parsons states that UAVs have increased in popularity over the past ten years due to the US using them in Iraq and Afghanistan. Other countries have witnessed successful use of UAVs in the military and want to incorporate them in their national defense systems. The increase in demand creates opportunities for producers in the United States to market internationally; however, international competition is also likely to increase as other countries enter the UAV market, which would increase supply. As Cam already stated, UAVs can be used for other purposes. Improvements in drone technology will further UAV uses, particularly in agriculture and commerce worldwide, creating more marketing opportunities for UAV producers.